I wonder how long it will be before the camera makers finally wake up and realize that build to order (BTO) will make them more money?
Here's the thing: product margins keep getting slimmer and slimmer. Let's consider a US$1000 camera. Let's further assume that it costs you US$600 to build. Let's sell that item to dealers for a 15% discount (the current "norm"). So if you're keeping track: camera maker gets US$850 less the US$600 in costs, or a US$250 profit (~40% GPM). The dealer gets US$1000 less the US$850 in costs, or a US$150 profit. So far, so good. But what happens when the price at which you can move the item drops to US$800? Your GPM drops like Donald Trump's Presidential poll ratings. One way to try to mitigate that is to charge the dealer more.
So let's lower the dealer margin to 10% on the new price. The camera maker now gets US$720 less the US$600 in costs, or a US$120 profit (~20% GPM). The dealer now gets US$800 less US$720 in costs, or US$80. That 20% drop in price to you cost both the dealer and the camera maker over half their profits. The camera maker, of course, has a method of recourse: they can cut the costs of producing the product somehow. Unfortunately, that doesn't work for products already produced and there is a finite limit to how much they can cut costs. Expensive imaging sensors don't grow on trees.
So where does BTO fit into this? Simple, it eliminates the dealer for some of the sales. If you want the camera today you can buy it from your local dealer (if they have it in stock). If you want it tomorrow, you can get it from one of the online dealers and have it overnighted. But if you want it with certain interesting and manufacture-only options, well, you'll have to wait a bit (often less than a week) and get it directly from the maker. That's exactly what Apple and others do. Indeed, they usually offer certain high end options only through BTO.
You'll note that all of the camera makers now have online stores that will sell you most, if not all, of their items. Why? Not for your convenience, but because if they can get someone to order from them they get to keep the discount a dealer would normally get. For that US$1000 camera, that's another US$150 in profit (or an increase of 60% in profit) without a lot of extra expense.
The problem, of course, is that you the customer don't see a lot of reason to buy at a camera maker Web site. For example, B&H is reliable, often cheaper, and it helps out small Web sites like mine in the process. Online stores like Amazon have return policies that are highly generous. Still others such as Best Buy may have a loyalty program that nets you a tangible future discount. How does the camera maker's Web site compete with those things? Well, right now they don't.
So consider BTO. What if you could customize your camera? We don't need much to make this work. For example: stock D4 is US$5499. Double the buffer via BTO for US$500. Add internal Pocket Wizard support for US$500. Add a dedicated 64GB internal storage option (essentially an internal third slot filled with a 64GB card) for US$500. You don't actually even need to "build to order." With only three options like that you only have eight models you'd have to stock (ABC, AB, BC, CA, A, B, C, and none). Do it the BTO way and you only stock one model with the back removed so that a technician can insert one to three of the options per customer request and put the back on before shipping it to you. I don't know about you, but double the buffer and an internal PW sounds pretty good to me, even at those prices, so I'm going to buy my D4 via BTO. Voila. Instant 15% in Nikon's pocket.
It works at the low end of the market, too, though it gets a bit trickier: stock Coolpix P310 is US$349. User selectable body panels (color and grips) for US$49. Enable RAW support with Capture NX2 bundle (;~!) US$149.
You get the idea.
Of course to pull this off the camera makers would have to get their acts together. Big time. After all, they're still assembling cameras with 200 screws in them because that's the way they've always done it and the gnomes doing the assembly have evolved to having miniature screwdrivers instead of fingernails. And the subsidiary repair facilities can't seem to keep track of lens caps, so how the heck can they keep track of user options? Plus companies like Nikon can't even keep the camera body in stock, let alone a bunch of optional BTO accessories.
So maybe it's not such a good idea to suggest BTO to the camera makers ;~). It's just another thing for them to not quite get right.
Cue Emily Litella. "Ne-ver mind…"
It's been pointed out to me that Leica already does this (but only for the M7 and MP). Learn something every day. Keep sending those cards and letters folks.